BTC is in trouble. But, is it bearish enough to drop to the "scary" 12000? Let's look at these charts👇🧵
1/ The 200-day mean (20500) is the main BTC resistance, now. The mean represents the bear market trend line. If Bitcoin trades above this curve, it's considered bullish. However, if it trades below this average, it’s bearish.
2/ Watch the angle and steepness of the average: it’s descending in a steady, well-defined path. This suggests that BTC has not escaped the bear market - no signs of reversal yet.
3/ Despite the promising attempt to break above 17500, the breakout failed. Failed patterns tend to perform better in the opposite direction. The opposite move to the upward breakout attempt is a downside tide.
4/ With the average mining costs at 19000-20000 and the BTC prices at 16800, the miners are underwater. It encourages selling forces to step in.
5/ Overall, BTC trades below the sideways pattern (descending triangle) of June - November. The breakdown in November placed a technical target at 12000.
But will it get there?
6/ Taking the above into consideration, it looks that Bitcoin is, in fact, in big trouble. However, the past is never a guarantee of future performance. After the -75% drawdown from the peak, Bitcoin is heavily underpriced and undervalued - technically and fundamentally.
7/ It doesn’t mean that it can’t go any lower. For now, the market probability favors the bearish narrative.
How to keep your sanity and trade through the depths of the bear market? It's not simple, but you can do this:
8/ Avoid catching the falling knives.
It's very unlikely to time to exact market reversal point. This works like winning a lottery. Even if you are lucky and get it right, mistaking luck for skill can lead you to ruin. Before you finally guess it, you may lose everything...
9/ Follow the trend.
This post is based on this twitter thread.